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Why Tesla Stock Fell on Wednesday

By Daniel Sparks – Apr 1, 2020 at 3:39PM

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One analyst thinks the electric-car maker's manufacturing in California could remain on hold through mid-June.

What happened

Shares of electric-car company Tesla (TSLA -0.61%) fell Wednesday, declining 8.5% as of 3 p.m. EDT.

The stock's decline is likely primarily driven by a sharp drop in the broader market. But one analyst did notably cut his forecast for the automaker's deliveries in 2020, citing an expectation for manufacturing at the company's Fremont, California, factory to remain paused through mid-June.

Vehicle production at Tesla's factory in Fremont, California.

A Tesla assembly line. Image source: The Motley Fool.

So what

Highlighting a pullback in the overall market on Wednesday, the S&P 500 was down 3.9% at the time of this writing. The market's drop reflects growing worries about the coronavirus pandemic.

Regarding Tesla stock specifically, Bernstein analyst Toni Sacconaghi said he now expects the company's total deliveries during the year to come in at 414,000, below its initial guidance for more than 500,000 deliveries this year. He believes Tesla's factory in Fremont will be shut down for a total of about three months during the pandemic.

Now what

Tesla will likely report its first-quarter vehicle deliveries on Thursday or Friday, giving investors the first glimpse into how they are faring this year. When it reports deliveries, investors should look to see if management updates its full-year guidance to take into account the impact of its factory shutdown.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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